Global medical suppliers pursue Chinese market

SHANGHAI (Sept. 28, 2:05 p.m. ET) — Like a lot of foreign plastic molders making medical devices in China, American injection molder MedPlast Inc. has its eye on the growing local market. It has previously focused on exports, but it hopes to now get approval from Chinese regulators to be a registered device maker for the domestic market.

“We see a lot more international companies trying to get their products in [to China],” MedPlast China president Tom Opielowski said in an interview at the recent Medtec China 2012 in Shanghai. “They are all talking about it.”

Other executives at the Medtec show, which attracts a large number of global medical manufacturing component makers and plastic companies, said they were paying attention to Chinese government plans to spend US$125 billion to provide access to basic medical care to much of the country by 2020.

“They are investing a lot of money in their health-care system,” said Larry Johnson, global marketing director for health care at compounder PolyOne Corp. in Avon Lake, Ohio. “That is an opportunity for us.”

While the interest is real, it was also tempered by an undercurrent of caution. China’s local medical market may be more about future potential for some of the global suppliers, and many of them remain focused on working for multinational customers, generally for export.

That caution seems to reflect more-intense price competition in the country, continuing concerns about intellectual property and a sense among some Western firms that the market may be developing more slowly for them than once anticipated.

“Everybody expected it to be faster than it has been,” said Jurgen Kaiser, sales vice president for pharmaceuticals and diagnostics in the Americas and Asia at Gerresheimer Regensburg GmbH in Wackersdorf, Germany.

“Before, everybody thought it would be like the automotive market.”

Still, Gerresheimer continues to invest in China. At Medtec, the injection molder was touting an expansion at its Dongguan factory that raised capacity to 15 injection presses, its ability to make a seamless transfer of production from other parts of the world to China, and the first inspection of its China plant by the U.S. Food and Drug Administration.

“We serve international customers in our China location, mainly exporting back to Europe,” he said. “In the future we will manufacture in China for China. That will also include the local Chinese companies, but now it is the international customers.”

Materials supplier Clariant International Ltd. of Muttenz, Swit­zer­land, is expanding capabilities as well. The company created a global, medical-focused team last year, including its first business-development executive in medical and pharmaceuticals for Greater China.

It’s seeing more interest in China as a medical-device export platform, including on the part of Chinese plastics firms, which have questions about global market requirements and about accessing global-quality materials, said Stephen Duckworth, head of global marketing, medical and pharmaceuticals, in the Clariant’s masterbatch business.

“It is a significant development for us,” he said. “They are interested in something they can’t buy around the corner.”

Duckworth said the rising costs in China — such as factory wages increasing 15 percent a year — seem to be having less of an impact on the medical sector, a point echoed by other executives at the show.

Companies were using the show to announce some China-related developments.

PolyOne said it is bringing its “rapid response” 24-hour delivery service for its specialty catheter resins to China. It also launched two Chinese websites for its medical materials, and continues to expand the health-care side of its China materials distribution business, Johnson said.

MedPlast, which acquired its China plants last year when it bought molder United Plastics Group Inc., wants to bring some of MedPlast’s capabilities in blow molding and silicone elastomer processing to the former UPG China operations in Suzhou, Opielowski said.

The Medtec show, which ran Sept. 26-27 in Shanghai, grew by 11 percent this year to 360 exhibitors and nearly 130,000 square feet of space, after increasing in size 22 percent last year, according to show organizer UBM Canon.

Providence, R.I.-based product development firm Ximedica was exhibiting at its first Medtec China show. With a local office in Hong Kong, the firm was testing the waters for providing Western market advice to Chinese firms or Chinese market advice to global firms.

“China is getting wealthier and wealthier,” said Morris Chow, director of Asian operations. “They have a lot of money and they want to pay more to buy better health care.”

In the intensively competitive world of contract manufacturing for the companies at the show, details on specifics of China sales were sometimes hard to come by.

One company, molder and contract manufacturer Forefront Medical Technology Pte. Ltd. of Singapore, did say it was opening a new plant in Changzhou to serve global customers interested in the China market.

But for the most part, companies talked in general terms about a market they say is tough to ignore.

“[China] has become more and more important for us,” said Lars Rasberg, Asia business manager for tubing extruder Optinova AB in Godby, Finland.